Secrets to Buying a Home that Will Appreciate Over Time

No one buys a home hoping its value will stay exactly the same for the next 30 years. In a healthy real estate market, most people just assume that their property will appreciate over time, even if only slightly. But, as many real estate investors already know, there are ways to pick out the most promising house.


 While you and your family’s needs should always come first when it comes to choosing a place to live, keeping some of these factors in mind can help you pick a home that will appreciate over time.

“Location, location, location”

This is one cliché that’s actually spot on. Of all the things that factor into a property’s potential to appreciate, where it’s located and what surrounds it are easily the most important.

Though it’s impossible to how the area around your potential home will change over the years, you can make an educated guess based on factors like the quality of the school system. Is the house 30 minutes from the nearest grocery store? Not great—unless a new grocery store has just broken ground two miles down the road, in which case, the neighborhood may soon be more desirable.

And this happens all the time. Whereas Brooklyn was once just a scruffy, working-class borough, a recent influx of young workers and artists fleeing skyrocketing Manhattan rent have upped demand, spiking property values.

Appearances matter…

Location doesn’t just matter for convenience’s sake. A rundown neighborhood with unkempt yards can bring down the value of your property, no matter how nice it is. Also be wary if there are any foreclosures in the area. Though this doesn’t necessarily spell out doom for the whole neighborhood, foreclosures do tend to look rougher due to lack of upkeep. It’s possible for the situation to snowball if those living near the foreclosure start to feel too apathetic.

…but not when it comes to your potential house

While it’s important that the property you buy has some potential, it’s okay if it isn’t in the best shape. In fact, you should be aiming to buy the worst house in a great neighborhood.

The logic here is pretty simple. If your aim is to buy low and someday sell high, you have much less room for improvement in a house that’s move-in ready. Also, you can’t change the location, but you can change the house.

Avoid a house that’s highly customized

For maximum appreciation, you want a property that will appeal to as many people as possible later down the line. So if a house you’re considering has a lot of customization or a very unique design, it may not make for a great investment, unless you’re planning to make significant changes.

Pools are a great example, as they have a tendency to be divisive. While some people seek them out specifically, to others, they’re hazards and eyesores that require all kinds of upkeep.

source: totalmortgage.com

Investing in commercial real estate in 2013

Commerical real estate investors ready to turn the page

 

Thwarted by a continued uncertainty, a languid recovery and a challenging environment for investment, investors are looking forward to put the past behind them and turn over a new leaf, according to a new annual report titled “Expectations & Market Realities in Real Estate 2013—Turn the Page,” which was published as a joint venture between the National Association of Realtors (NAR) and Real Estate Research Corporation (RERC), Deloitte. 

 

The report states that investors have come to realize that this particular atmosphere will possibly remain for some time and that attunements may be necessary to maximize performance and yield of commercial real estate in this sluggish economy. One such adjustment made by investors is the wholesaling of commercial real estate.


Wholesaling commercial real estate opportunities in 2013

Investors are increasingly considering wholesaling commercial real estate in 2013 in order to achieve significant profits in a short time.  In what way is the commercial real estate market transforming at this juncture? What are the best opportunities to realize this year? Find out now.

The requirement for wholesaling commercial real estate in 2013

 

Commercial real estate has fallen later compared to residential following the bursting of the bubble. Hence, it has taken a slightly longer time to bounce back but the common agreement is that the commercial market has reached its lowest point, has established new bedrock to gather momentum and is ready to start growing once again.

The growth of the economy may not be the speediest at the moment but there are numerous determinants functioning to propel the commercial property sector. Fresh startups are capturing space in order to launch while large existing organizations are planning to shift base in a major way since they are now not fastened to old fortresses due to a dearth in talent and technology. Investors from all across the globe are beginning to channelize their funds into establishing commercial properties.

This highlights the growth in both the demand and the amount businesses and investors are ready to pay just to get that extra space, particularly as they hurry to make the most of yields prior to cap rates getting tapered off and the interest rates shooting up. Simultaneously, mortgage lenders will possibly impel foreclosures on the properties as both demand and values go up. This atmosphere is conducive for wholesaling of commercial real estate so as to achieve sizable and speedy profits.


What's the difference?


There are three vital differences when it comes to wholesaling commercial real estate properties compared to single family dwellings.

Financing


The mortgages on commercial properties are entirely different compared to that of residential. This indicates that they are much easier to get at present and depend more on the property and not the individual purchaser. Underwriting for such loans can be seen to be softening up in the same way as it’s getting difficult for residential investors.

Marketing


Diving into multifamily, industrial or retail property or even office indicates marketing to an entirely different demographic compared to individual dwellings. Find out what they require and what’s of significance to them.  Also, get to know the best marketing mediums to reach out to them.

Due Diligence


Due diligence is slightly different too. The determinants which have to be taken into consideration are little different. Lender requirements may also vary. These include environment reports, rent rolls and appraisals. Get to know the difference and you’ll do well.

Where should you invest?


Look around for distressed properties, non-performing loans, distressed tenants, proximity to transport hubs and large businesses and government initiatives in various locations before making an investment in commercial real estate.

 source: everythingfinanceblog.com

How to Raise Cash to Invest in Real Estate

A home-equity line of credit against your primary home is a good source of funds for first-time flippers, says Letitia Patterson, a real estate agent who has invested in rental and distressed properties in the Detroit area. Short-term bridge loans from private lenders, known as hard money loans, are a higher-risk way to get the cash. These loans are easier to get than traditional mortgages but typically carry double-digit interest rates—not necessarily a problem if you sell the property quickly and pay off the loan.


If your goal is to get started as a landlord and you don’t have the cash for your first rental property, consider buying a duplex, living in one unit and renting out the other. In many cases, your tenant’s rent will cover the mortgage. Once you’ve built up enough equity, you can pull some money out with a cash-out refinancing or home-equity loan and buy another property, gradually growing your portfolio.


Another strategy is to take out a mortgage for a primary residence, move into it and rent out your existing home, says Ross Hamilton, a longtime real estate investor and chief executive of Connected Investors, a social media site for real estate investors. You don’t have to pay off your first home as long as you can demonstrate to lenders that the rental income will cover the mortgage, Hamilton says. A typical owner-occupant loan requires you to live in the home for 12 months. But after that, you can rent it out and keep the low-cost loan. Learn more about real estate financing through BiggerPockets.com, a real estate investor network.

source: kiplinger.com

Manila seen as a rising hub for real estate investment

MANILA, Philippines - Manila's appeal as an real estate investment and development destination has grown significantly this year, according to a report released by the Urban Land Institute and PwC.

Based on the Emerging Trends in Real Estate 2013 report, the Philippine capital ranked 12th out of 22 cities in the list of top investment cities.

Jakarta topped the list as the number one city in investment and development, followed  by Shanghai, Singapore, Sydney and Kuala Lumpur.

Manila's 12th ranking, however, was higher than Tokyo (13), Seoul (14), Auckland (17) and Osaka (22).

Manila's ascent in the rankings is even more significant, as the city ranked near bottom of the rankings in previous years. It ranked 18th last year.

"Markets in Manila have performed well in the past couple of years as a result of the growing economy, a transparent and business-friendly government, and the country’s ongoing success—an 'eye-opener'—in attracting foreign corporate clients to its business process outsourcing (BPO) facilities. Bureaucracy has declined and transparency has improved considerably over the past few years," the ULI report stated.

In terms of city development, Manila ranked 9th, also ahead of Hong Kong (10), Sydney (13), Melbourne (14), Seoul (17) and Tokyo (18).

ULI said Manila's growing appeal is part of a greater trend that shows investors turning to secondary markets and emerging cities in search of returns.

PH property boom

The Philippine economy's better-than-expected performance has continued to fuel the property boom.

"Manila is in the midst of a property boom. It’s the best that we’ve seen in decades—clearly a sign of the increasing confidence in our economy,"said Judith Lopez, Chairman and Senior Partner at Isla Lipana & Co.

"The government’s transparency has significantly improved, making the country more attractive to foreign investors. The positive outlook in Manila’s real estate sector is mirrored by the great opportunities presented by the BPO and gaming sectors over the next two years," she added.

As proof of the boom, Jones Lang LaSalle reported higher leasing activity in Manila.

"As of October 2012, the firm has tracked 413,000 sqm. of office leases, a 15% rise from 2011 so far. With several more leases expected to close before the year ends, leasing activity has exceeded our forecast. Further, we are seeing confident investment sentiment not just in office development but also in the acquisition of property for future development, whether it be for mixed use, commercial, residential, hospitality, retail or industrial," said Jones Lang LaSalle country head David Leechiu.

Foreign ownership still an issue

However, the ULI report said the Philippines' policy barring foreign ownership of land is a major concern for foreign investors.

"However, though investment prospects appear bright in the Philippines across all sectors, government regulations that bar foreigners from holding majority landownership continue to deter international investment. What is more, local developers have little incentive to partner with foreigners, given the availability of ample liquidity from domestic sources," the report said.

Foreign investors are likely to be limited to the gaming and BPO sectors. "Admittedly, both present
large opportunities, with the latter currently accounting for some 70 percent of new office take-up in Manila," the report said.

The ULI report covered 22 cities in Asia Pacific, citing opinions of investors, developers, property company representatives, lenders, brokers and consultants. ULI is a global nonprofit education and research institute.

source: abs-cbnnews.com